Difference between LLP and a Private Limited company Registration in Madurai
Difference between LLP and a Private Limited company Registration in India
Difference between LLP and a Private Limited company, Birds Eye Comparison
Many entrepreneurs who start a new business are curious and confused about this
Difference between Private Limited Company and LLP. Both organizations offer many,
Running a small to large business requires the same features, while also differing in some aspects. In this article, I decode the comparison of Private Limited Company vs. LLP from the point of view of an entrepreneur starting a new business. Here, we discuss about the topic on Difference between LLP and a Private Limited company Registration in Madurai. Here a clear note about this topic below
The private limited company registration process and the LLP registration process are very similar with some difference in the documents and forms filed for integration. There are steps for inclusion of a private limited company
1. Obtaining Digital Signature Certificate (DSC) for the proposed director,
2. Obtaining Director Identification Number (DIN) for the proposed director,
3. Getting name approval from MCA
4. Filing for insertion.
LLP registration has a similar process:
1. Getting Advanced Mark Declaration (DSC) for the proposed accomplices
2. Acquiring Chief Distinguishing proof Number (DIN)/Assigned Accomplice ID Number (DPIN) for the proposed accomplices.
3. Name approval from MCA
4. Filing for insertion. Both the private limited company and the LLP registration are registered with the Ministry of Corporate Affairs and are issued a certificate of a corporation.
The processing time for the incorporation of a private limited company and an LLP also takes about 20 days to be incorporated with both companies.
When government fees for inclusion of LLP are significantly cheaper
Difference of government fees for inclusion of a private limited company.
LLPs have been introduced to meet the needs of small businesses and hence LLPs
Enjoy low government fees for investment. Also, the number of documents required to be printed on non-judicial stamp paper and notarized for LLP registration is less as compared to private limited company registration.
Both LLP and Private Limited Company offer similar features. LLP and
The private limited company are both separate legal entities and have assets and
Responsibilities that are different from promoters. Both LLPs and private limited companies are suitable for relocation, although private limited companies offer more flexibility when it comes to private ownership transfers or sharing. Both the LLP and the private limited company have a perennial life, unless closed by a promoter or a competent authority.
LLP is a separate legal entity registered under the LLP Act, 200. The partners of the LLP are exclusively responsible for the responsibilities of the LLP. Partners have limited liability and are responsible only to the extent of their contribution to the LLP.
Private Limited Company is a separate legal entity registered under the Companies Act, 201. The directors and shareholders of a private limited company are exclusively responsible for the liabilities of the company. Shareholders have limited liability and are liable only to the extent of their share capital.
A privately owned company offers more flexibility for promoters when it comes to ownership and ownership sharing. “The responsibility for private limited company is controlled by its shareholding and a private limited company can have up to 200 investors. Further, since shareholders are not directly involved in the management of the company, there is a clear distinction between shareholders and management in a private limited company. Therefore, a private limited company is advantageous when it comes to ownership and management facilities.
In LLP, there is no clear distinction between owners and management. In an LLP, LLP partners own the LLP and also have the authority to manage the LLP. Therefore, the partner in an LLP will be both the owner and the manager, while in a private limited company, the shareholders (owners) do not have to have management powers. A private limited company is suggested for any business considering FDI or representative investment opportunities or value assets or investment reserves.
Duty consistence is something very similar for both private limited company and LLP. However, LLPs have significant benefits when it comes to compliance with the Ministry of Corporate Affairs. If the annual turnover of LLP is Rs. 40 lakh and a capital contribution of Rs. 25 lakhs. A private limited company, on the other hand, has to file its financial statements with the Ministry of Corporate Affairs every year.
A Pvt. Ltd. The company is required to pay almost dividend distribution tax. 16.50% at the time of distribution of profits to its shareholders. Such dividend income is tax-free in the hands of shareholders.
The tax structure for LLP is simple. LLP is subject to income tax only. Dividend distribution does not apply to LLP. Once the profit is declared and taxed by the LLP, the shared income is tax-free in the hands of the partners. Pay firm is taxed at 30%.
The minimum optional tax is levied on both LLP and Pvt. Apply to Ltd. Company.
Fines and penalties
Penalties for non-compliance or late filing of documents with the Ministry of Corporation Affairs are often higher for LLPs, as there is no cap on liability if compliance is not maintained, a fee of Rs 100 per day is charged. . Therefore, LLPs can bring hefty fines or penalties from the MCA for non-compliance. Therefore, it is important for the promoters of LLP to be aware of the due date and file the required documents in the registrar in a timely manner.
Private limited companies have existed longer than LLPs and gained wide recognition in India and the world. Therefore, there are well-established procedures and procedures for private limited companies. LLP on the other hand is a recently launched entity in India. Therefore, some rules, regulations and procedures have continued to evolve. LLP Also not recognized in India as a private limited company, as it is a relatively new concept.
A private limited company gives its promoters a better image or standing than an LLP. The private limited company also enjoys good access to banks and foreign direct investment funds.
LLP: Foreigners are allowed to invest in LLP only with the approval of Reserve Bank of India and Foreign Investment Promotion Board (FIPB).
Private Limited Company — Foreigners are allowed to invest in a private limited company
Company under automatic approval route in most areas.
Existence or liveliness
Partnership- The existence of a partnership business depends on the partners. May be for dissolution due to death of spouse.
LLP- The existence of LLP is not dependent on partners. Can be dissolved only voluntarily or by order of the Company Law Board.
Private Limited Company — The existence of a private limited company does not depend on the director or shareholders. Can only be dissolved by voluntary or regulatory authorities.